Day after day, people encounter financial difficulties that their income cannot handle. These difficulties may be health challenges, a car break down, a home repair issue (say, a broken plumbing line) or myriads of other issues. What can one do in these situations?
Faced with unplanned and unexpected expenses, one has the option of either begging for spare cash from friends and family or borrowing from them. Conversely, they can seek financial assistance from banks or other organizations; the most common form of this assistance is a loan.
The most popular type of loan that is available to consumers in this circumstance is consumer loan. Thanks to technology, there are many variations of this financial product; you can get the conventional loan which takes about 2 to 4 weeks to process and disburse or you can get the fast track option known as same day loan.
In this article, we will briefly discuss what consumer loan is, the different categories and how one can get a same day consumer credit with low interest so stay with us…
What Is Consumer Loan?
Consumer loans are financial products offered by banks and financial institutions to help their customers take care of personal expenditures. These loans can either be secured or unsecured. The secured options are those that are backed by collateral. What this means is that the borrower has to put down an asset of value that is equal to or greater than the amount they are applying for.
The reason for the collateral is so that the lender can have security to cover the amount borrowed in the event that the borrower defaults. So for example, a mortgage is a secured loan and the collateral oftentimes is the property that the loan was taken out to purchase. If it happens that the borrower defaults, the lender will repossess the house/property and sell it to recover the amount borrowed.
Unsecured loans on the other hand, are loans that are not backed by collateral which means that the borrower does not put down any asset before getting the loan. Examples of unsecured loans include student, medical, personal loans and credit cards.
One major thing to note about these two categories of credit is that interest rates for unsecured credit facilities are usually higher than that of secured loans. This is because the collateral for the secured options mitigates the risk for the lender.
What Is Same Day Loan?
This is a category of consumer loans that one can apply for and have it processed and approved on the same day. All thanks to technology, a consumer can apply for this credit facility using their BankID (this is applicable in Norway). When you apply online, you give the lender the authorization to retrieve all the information they need about you from the relevant registers.
Due to the digitalization of the whole process, it is seamless and fast; in fact some lenders can give you a response to your application within minutes of submission.
How Is the Loan Application Processed?
When you submit an application to the bank/lender, the first thing they do is to run a credit check on you. In the process of running this check, they will also obtain the following details:-
- Your age
- Your annual income and whether you have a steady verifiable income
- Your citizenship status and residency
- Your employment status (no lender wants to give their money to an unemployed person).
- Outstanding debts.
The above information will determine the speed at which your application will be processed. The process is easier and faster for folks who are of legal age, have a good income (that is verifiable and also consistent), small amount of debt and a high credit score. This is because the AI system can quickly review the application and send out a response.
However, for folks who have some financial issues such as low credit score, low income and significant outstanding debts, the process will be longer. This is because in these cases, the application will most often have to be processed manually. The lender will then begin to collate additional information such as the payslip of the applicant for at least 3 months.
Factors that Affect the Speed of Processing and Approval of Same Day Loans
From the above, we can deduce factors that can affect the speed of processing and approval of your application. However, for the sake of clarity, we will go on to list these factors.
- Low income – If you are applying for a loan that’s outside your income range you don’t stand a high chance of getting approved.
- Age – Although 18 is the legal age world over, there are some banks that do not give loans to folks that are less than 23 years.
- Employment – Some banks or lenders prefer to give out loans to only people who are employed. Self-employed folks have to go the extra mile to show that they have the capacity to repay the loan if granted. The process of producing proof of ability to repay will definitely slow down the process.
- Poor Credit Score – An applicant who has a poor credit score is considered a high risk for any lender. This therefore means that either they may not be approved or the loan may come with very high interest rate.
- Time of Filing the Application– The time you send in an application also determines how fast it will be processed and the funds disbursed. It is recommended that you send in your application early on a weekday (preferably between Monday and Wednesday), this will put it on the priority list for the workday.
- Documentation Required – If your application requires additional documents, it will elongate the process. Therefore it is recommended that you find out all the documents needed and have them ready before you start the application process.
How to Get Low Interest Same Day Loan
One factor that affects how beneficial or not a credit facility will be is the interest rate that it comes with. Some borrowers have regretted taking out a loan because of what the interest on it amounted to at the end of the day. In order to save you any form of regret, we have compiled a list of factors that can help you get low interest same day loans and they include the following:-
- Use a loan agent – This is the fastest and least stressful way of getting same day loan with low interest. This is because these agents have access to a good number or banks and lenders. They’ll help you sieve through as many options as possible until you get an offer that will give you your desired interest rate.
- Check out as many offers as possible– This option is for people who do not want to use a loan agent. You will have to make out time to sieve through as many options as possible to find the one with the best interest rate for you.
- Compare the offers – Compare all the offers that you get and ensure that you use the same parameters. The most important things to compare are the effective interest rates and the overall cost of servicing the debt. This will help you determine which offer is the best for you.
- Ensure you don’t have outstanding debts – Lenders consider any applicant with outstanding debts a high risk customer; therefore even if they approve additional credit for them, the interest rate will be high. Therefore pay off outstanding debts before applying for same day loan or you seek refinancing. You can actually get lower interest with refinancing if you have outstanding debts.
You can visit forbrukslånlavrente.com – lån på dagen for more tips on how to get low interest same day consumer loan.
Consumer loan on the day is a financial product that has saved a good number of people in times of emergency; it has also unfortunately put a number of people in debt. The major reason why many people end up in debt through this product is because of high interest rate. That is the reason why we have written this piece to help you understand the product better.
We have shared tips on how to get the best of this product by getting an option with low interest. Bear these tips in mind as they will come in handy now or in the future.